Tejas Appraisal Company has answers to "Frequently Asked Questions"

Tejas Appraisal Company is always ready to address any inquiries you might have about appraisals in Kendall County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
Why would I request a real estate appraisal?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
After completing the report, what guarantee is there that the final number is veritable?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does Tejas Appraisal Company get the information used to estimate values in Kendall County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Back to top)

The appraisal process is an evaluation that leads to an opinion of value. This opinion or estimate is arrived at using a formal method that generally utilizes three "common approaches to value". One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the property, minus depreciation and physical dilapidation, plus the land value. Another of the methods is the Sales Comparison Approach - which involves finding a comparable analysis to other similar properties within a close proximity which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the market value of a property based on what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Back to top)

An appraiser generates a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers show their professional analysis in appraisal reports.


Why would I request a real estate appraisal?   (Back to top)

There are many reasons to purchase an appraisal from Tejas Appraisal Company with the most common reason being real estate and mortgage transactions. Some other reasons for getting an report include:
  • To get a loan.
  • To reduce your property taxes.
  • To build a case for a homeowner's equity and remove PMI.
  • To challenge high property taxes.
  • If you need to take care of an estate.
  • To give you a leg-up when purchasing a home.
  • To find a reasonable price when listing your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS require an appraisal on every property.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
If you need a more detailed explanation of the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Back to top)

The appraiser is not a home inspector and does not do a complete home inspection. The purpose of a home inspection is to investigate the structure of the house from foundation to attic. For the most part, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Back to top)

To be blunt, it's night and day. The CMA depends on indefinite trends in the market. Appraisals use similar sales which are verifiable resources. Location and construction costs are also important in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person creating the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.

What does the appraisal report contain?   (Back to top)

Each appraisal must reflect a credible estimate of value and will clearly state the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the appraisal.
  • Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible items.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was included in the process of completing the assignment.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what guarantee is there that the final number is veritable?   (Back to top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal contained an appropriate analysis of the data.

  • Whether individually or collectively, there were no grave errors contained in the appraisal, nor any relevant details left out.

  • That appraisal services were provided in a careful and conscientious fashion.

  • That a trustworthy, supportable appraisal report was communicated.
To become a state licensed appraiser, we must fulfill extensive education and experience requirements that train us to formulate an unbiased opinion. In addition, appraisers must stick to a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification is achieved through classroom study, tests and real world experience. Once an appraiser is licensed, he or she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Back to top)

Most of the time, appraisers are hired by mortgage lenders to estimate the value of property involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Tejas Appraisal Company get the information used to estimate values in Kendall County or other areas?   (Back to top)

One of the most important things an appraiser does is to compile property data. Data can be divided into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

How can a licensed appraiser help me?   (Back to top)

An appraisal is a valuable tool anytime your home's value is relevant to a financial decision. If you're selling your home, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Tejas Appraisal Company is the best documentation to ensure assets are divided properly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (Back to top)

PMI is an acronym for Private Mortgage Insurance. This added plan guards the lender in case a borrower defaults on the loan and the market price of the house is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Has your home value appreciated since you first purchased? Call Tejas Appraisal Company today at 830-249-7274. You may be able to cancel your Private Mortgage Insurance premium.

Does the appraiser need anything from me in advance?   (Back to top)

We begin with an inspection of the home. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its features. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
  • Records on the latest purchase of the property in the last three years.
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Title policy that lists encroachments or easements.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

What does "Market Value" mean?   (Back to top)

In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Does the appraisal belong to the bank or the consumer?   (Back to top)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements?   (Back to top)

The added value of a particular amenity truly depends on the local market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

As a rule, the most value returned from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.